REDUCING WOOL STOCKS

Te Awamutu Courier, Volume 73, Issue 6283, 20 September 1946, Page 7

REDUCING WOOL STOCKS

DEPENDENT ON AMERICAN PROSPERITY (Contributed by Massey Agricultural College) (“If the United States of America can remain prosperous, free from boom and slump, it will prove the greatest contribution to world prosperity which in turn will help to reduce the huge piles of surplus raw wool in the stores of producing countries. World poverty is at*the back of the problem of disposal of the wool surplus.”) This summing-up of the future possibilities of the wool trade was made by Mr H. B. Low, lecturer in Economics at Massey Agricultural College, in an address at the College to a gathering interested in the wool industry. Mr Low, who has represented New Zealand on the agricultural committee of the Far Eastern section of UNRRA, said that when the wool auctions were resumed German and Japanese bidding, which in pre-war years had collectively commanded 22 per cent of the wool exports of producing countries, would be absent for some time. Those two countries, however, might be allowed to import raw wool in order that, by exporting woollen goods, they might pay the. cost of their minimum needs of imported food.

Though the five exporting countries had almost doubled their own pre-war consumption of wool, production had also The world production of apparel wools in the 1943-44 season was I’o per cent above the average for the period 1934-38. Crossbred wool had increased even more than that. The percentage increase for crossbred wool in Australia and Argentina was 40 or more, although recent drought had temporarily reduced those figures. New Zealand’s increase of 14 per cent was about the world average increase for crossbred wool.

Absorption of the world wool pile, plus current clips, in 12 years, would necessitate at least a 20 per cent increase in the buying of Dominion wool by the main consuming countries other than Germany and Japan. That extra buying would represent an increase of about 12 per cent in the pre-war consumption of wool. The speaker said that one useful proposal which had been made was that some of the wool should be used in the creation of “buffer stocks”— perhaps one year’s norma] supply. That would, on the face of it, halve the stocks which might be truly regarded as “surplus.” The difficulty of putting that suggestion into practice lay in the fact that the stocks had “had the eyes picked out of them,” and so were not really a representative sample. If the missing parts of the typical year’s production were added to the buffer stock pool from current clips, the market would be very poorly supplied with just those classes of wool which had the readiest sale.

New Zealand’s chance of disposing of extra wool on the United States market depended on the extent to which the American Government lowered its present high import duty. The consumption of wool per head in the United States was less than half that of Great Britain, due to some extent central heating. American use of wool might conceivably increase from 600 million pounds to 750 million* which would mean a doubling of prewar imports. Those purchases, averaged over the five-year period, 1934 to 1938, had represented only six per cent of the saleable surplus from the main producing countries; compared with Great Britain’s buying of 27 per cent, France and Belgium 29 per cent, Germany 12 per cent, the rest of Europe 12 per cent, Japan 10 per cent, and other countries 4 per cent. When asked later to comment on the recent statement that the disposals of stocks of wool in the past 12 months had exceeded all expectations, Mr Low pointed out that most of that was merely a change of ownership of the wool. The problem of actually getting the wool manufactured add consumed still remained.